Government Extends Bank Closures, Defers Debate on Levies

NICOSIA, Cyprus—Clumps of Cypriots—"No" written on their palms and "Hands Off Cyprus" on their signs—took to the otherwise quiet streets of the capital as the government worked to modify a deal that would see it reach into depositors' accounts to pay for part of a euro-zone bailout of the island's outsize and troubled financial system.

Cyprus on Monday said banks would remain closed until Thursday, as the government sought more time to shore up support for the levy on accounts and raced to avert a...